Abbott's mentor turns on the Prime Minister

Pupil Tony Abbott gets a particularly bad report card from his teacher and former Liberal leader.

Prime Minister Tony Abbott. Picture: DOMINIC LORRIMER

Tony Abbott did his apprenticeship in national politics as a member of John Hewson’s staff. As the teacher surveys the work of his apprentice today, however, he’s distinctly unimpressed.

In fact, the economist and former Liberal leader is emerging as a consistent critic.

Some weeks ago Hewson criticised the Abbott government’s first budget as unfair. This week he criticised Abbott's policy on carbon emissions. And when I talked to him on Friday, it turns out that he is critical of pretty much the entire Abbott project so far.

Hewson prefaces his remarks by acknowledging that “it’s early days and it’s unfair to judge people so early on”. But he proceeds nevertheless to judge the government on its nine months in power.

His broadest critique is that Abbott, for four years his press secretary and political adviser, has failed to communicate a vision: “They had a chance with the budget to pull all these bits and pieces together; the end of the age of entitlement, fine; not supporting industry, fine; now pull it all together,” says Hewson.

“Where the jobs are going to come from, where the growth is going to come from, what Paul Keating called an ‘overarching narrative’. Have a consistent message.

John Hewson. Picture: BRENDAN ESPOSITO

“There’s no clear, consistent message, other than, ‘We have to cut and cut more and more just to get the budget numbers’, not with any reform purpose. It’s unfair and it’s inconsistent. A bit of vision is what’s really called for.”

Hewson is not critical of Abbott because he thinks him too ideologically right-wing. As Liberal leader from 1990 to 1994, Hewson was the most pro-market, pro-privatisation, small-government political leader Australia had seen.

But the former Treasury economist, IMF adviser and investment banker does find the Abbott government guilty of serious unfairness: “They raised expectations that the budget would be fair, but it it’s very inequitable. They said everyone would share the burden, but they clearly didn’t except for the cosmetic 2 per cent levy” on people earning more than $180,000 a year.

“That’s 1 per cent of the income for a higher earner, but they’ve made sizeable cuts of 10 per cent to 15 per cent for people on low incomes” through welfare changes. “It’s a significant hit to people on low incomes,'' he says.

About two-thirds of the adult population agrees with Hewson’s charge of unfairness, according to the polls. But what of Joe Hockey’s rejoinder to the complaint that the budget is unfair? He’s said that government isn’t supposed to deliver equality of outcomes, but should aim for fairness of opportunities.

“There’s too big a gap between equality of opportunity and equality of outcomes,” replies Hewson.

What could the government have done to make the budget fairer? “I’m in favour of tightening the eligibility for pensions, but you should increase the pension payment for the people who remain, pay bigger pensions.

“And at the same time you look at pensions you have to look at superannuation tax concessions. It’s heavily skewed in favour of wealthy people.”

To get a $100 benefit from the superannuation system, a person with a modest income of $20,000 a year must put in $118, he says. A person on $250,000 a year must put in only $62.50 to get a $100 benefit.

“That’s a staggering inequity. If you had a more broad-based approach”, dealing with both welfare reform and reform to the generosity of tax concessions for the rich, “you’d have a much more defensible position”.

To be fair to the government, Abbott promised not to change the super system without taking any proposed changes to an election first. So if the government proposed any change, it would be for its second term.

Hewson doesn’t argue with the government’s trajectory for returning the budget to surplus: “I think returning to surplus over 10 years is sensible given the weakness of the economy, but they’ve burned all their political capital in the way they’re getting there.”

Hewson was a professor of economics for 11 years before he became the leader of the federal Liberal party, and now he is a professor again. He holds a chair at the ANU’s Crawford School of public policy.

The professor marked down his former student on other points of political management too: “Another thing that surprised me - taking $80 billion out of the states for health and education. They had a premiers conference two weeks before”, where the prime minister and treasurer met all the state premiers, “and they forgot to mention it. They shouldn’t have been surprised at the reaction they got.” Furious.

And Hewson is one of many bewildered by the government’s sudden need to revise long-standing bipartisan Australian policy on Israel and the Palestinians.

The Attorney-General, George Brandis, declared that Australia no longer considered East Jerusalem to be “occupied” by Israel.

This gratified Israel’s prime minister, Benjamin Netanyahu, but infuriated Arab states. Some threatened to punish Australia by cancelling imports of livestock. The government has been trying to smooth it over ever since.

"I was surprised,” says Hewson, as was the entire country. “The government says we’re not changing policy, they say we’re not playing word games. But if you’re not changing the policy, then you are playing word games. If you make a mistake, say you made a mistake and fix it. This was clearly a mistake.”

To Hewson, it is a standout symptom of a government that lacks focus and discipline.

These charges against his former apprentice are so far chiefly ones of political mismanagement and political misjudgment. But on climate change, Hewson frontally attacks the policy itself.

This week, the Senate gave Abbott his first trigger for a double dissolution. It blocked, for a second time, his attempt to repeal the $10 billion Clean Energy Finance Corporation.

This outfit, a Labor creation, invests public funds in the most efficient renewable energy technologies. It is profitable. Labor and the Greens combined to frustrate the government’s attempts to abolish it.

Says Hewson: “You can make money by sensibly responding to climate change.”

“That’s why the CEFC was a very sensible initiative. The big question today is, ‘Where are the jobs going to come from?’ That’s a big concern.

“We could have been a global leader in technology and renewables and turn it into a significant industry, a big employer, using our brain-based capacity. That’s a lost opportunity.”

He accepts that the government has a mandate to abolish the carbon tax.

But he says it can also pursue carbon responses as a national economic opportunity: “I think we can do both.”

The government’s suspicion of climate change will have a larger cost, Hewson fears: “I think the world is going to move very quickly on climate change in the next year” as negotiations conclude on the post-Kyoto regime.

“Barack Obama wants to make it part of his legacy and I think China is now responding and responding quickly. We will probably be a stranded asset.”

In English, a stranded asset is one that has lost its value and is now obsolete.

It’s not that Hewson thinks the Opposition is any better than the government overall. “Bill Shorten is at least as bad.” But he thinks both Labor and Coalition are culpable for what he calls “the debasement of politics”. The election campaign, he says, was a “bizarre experience”.

“The sort of commitments made by both sides were never going to be delivered. They were both promising all sorts of spending on Gonski, national disability insurance scheme, infrastructure, you name it, and promising lower taxes and promising to bring down the deficit at the same time. Whoever won government was going to have to eat crow at some point.

“And they got away with it.” After considering the government’s dismal polling, he later amends this: “They expect to get away with it.”

The cruel hoax on the public of undeliverable election promises “has got worse in the last 15 or 20 years”.

That timing is not coincidental. It’s 21 years since Hewson lost the so-called “unloseable election” against an unpopular Paul Keating.

The reason he lost was his complete honesty with the electorate. His detailed, 650-page manifesto “Fightback!” was a program of radical reform, honestly set forth.

Keating exploited it to wage a mighty scare campaign, with dishonest promises including the so-called L-A-W tax cuts that he dumped after winning power.

Fightback! is often called the longest suicide note in political history. It was also the last time that a political leader was rash enough to level with the Australian people. The 650 pages of detail is a stark contrast to the glossy 40-page pamphlet put out by Abbott.

Indeed, it was Hewson’s negative model of politics – how to lose an election by telling the people the truth – that had a greater impact on his apprentice than any of his positive lessons.

Abbott so far has resisted the urge to utter a word of criticism of his former employer. According to Benjamin Disraeli’s precept, he doesn’t need to – the best riposte is a majority. Abbott has one.

Besides, Abbott is not taking a vindictive approach to critics from his own side of politics.

On Monday, a Liberal senator, Cory Bernardi, publicly opposed the government’s 2 per cent levy on high income earners: “We should be looking to lower taxes in this country,” he told the Senate.

Rather than shun or chide Bernardi, Abbott approached him at a Senate barbecue that evening. Coalition senators were very interested to see Bernardi and Abbott leave the event and head into the prime minister’s suite together in a convivial mood.